Williams-Sonoma Inc (WSM)
Liquidity ratios
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.45 | 1.24 | 1.31 | 1.34 | 1.09 |
| Quick ratio | 0.74 | 0.30 | 0.55 | 0.73 | 0.34 |
| Cash ratio | 0.67 | 0.22 | 0.48 | 0.65 | 0.27 |
Williams-Sonoma Inc has shown a fluctuating trend in its liquidity ratios over the past five years. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has generally been above 1, indicating a strong liquidity position. The ratio slightly improved from 1.09 in 2020 to 1.45 in 2024, suggesting an enhanced ability to cover its short-term liabilities.
On the other hand, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has shown significant volatility. The ratio increased from 0.34 in 2020 to 0.74 in 2024, indicating an improvement in the company's ability to meet immediate obligations without relying on inventory.
The cash ratio, which is the most conservative liquidity measure and represents the company's ability to cover short-term liabilities with just cash and cash equivalents, has also exhibited variability. The ratio has generally been low but showed improvement from 0.27 in 2020 to 0.67 in 2024, signaling a strengthened liquidity position in terms of cash availability.
Overall, Williams-Sonoma Inc has demonstrated an improving liquidity position over the past five years, as indicated by the upward trend in its current, quick, and cash ratios. This suggests that the company has sufficient liquid assets to meet its short-term financial obligations, providing a favorable outlook for its financial health.
See also:
Additional liquidity measure
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 117.79 | 163.42 | 112.01 | 105.73 | 133.28 |
Williams-Sonoma Inc's cash conversion cycle has displayed fluctuations over the past five years. The trend indicates that the company's efficiency in managing its cash flows from inventory to receivables and payables has varied. In the most recent fiscal year, as of January 28, 2024, the cash conversion cycle stands at 117.79 days, showing an improvement compared to the previous year. However, it remains higher than the levels seen in fiscal years 2022 and 2021. This suggests that Williams-Sonoma Inc is taking slightly less time to convert its resource investments into cash but still faces challenges in optimizing this process efficiently. It is crucial for the company to continue monitoring and potentially streamlining its cash conversion cycle to enhance its financial performance and liquidity management further.